As the final instalment of the results from our CFO survey on HR, (Read Part 1 and Part 2 here), I wanted to share with you some of the comments we received from CFOs about their relationship with Human Resources.
In some companies, there is no love lost between Finance & Human Resources.
Below are individual comments from CFOs about their relationship with HR based on their own experiences and backgrounds. These comments were curated from our survey to prove the point that Finance and HR don’t always see eye to eye.
Here are some of the more interesting comments we received:
Having HR report to the CFO has been good for our company. It offers a sounding board for HR on tough issues and a little more objectivity vs. operations who are more concerned about staffing than possibly dealing with a difficult personnel issue.
I’ve been CFO of three organizations and have always found a conflict between the CFO and HR. HR believes they should have a direct ear to the CEO – which they should on personnel issues. Often though, this bleeds over to cover financial decisions. If HR does not agree with CFO analysis on a benefits package or offering, often there is a private discussion between HR and the CEO where it “comes up.” This usually results in many extra processes and meetings with the end result being the more logical, CFO proposed issue.
A strong HR dept can add tremendous value to the organization and support to the CFO. However, it has to be balanced in the services they provide and not be just great in one or two areas – it needs to be strong in all areas otherwise it can effect the performance of the employees and the company, similar to the finance function. HR, like finance, is an internal service organization that needs to provide the best quality of service to be an effective dept that adds value to the organization and not a drain on it. I believe that HR and Finance can be very strategic if first they are operating effectively, aligned together and operate as a team.
My biggest headache is HR. They continuously enter pay rates, SSN, address, benefits, etc. incorrectly into payroll and the Accounting software. I have complained to the CEO, but he has not corrected the problems. Accounting often does not have time to take lunch, because we are fixing HR’s mistakes. HR however, manages to take long lunch breaks daily.
(The next one is my favorite)
I should mention that the Director of HR is very pretty and the CEO cannot say no to her or will he make her do her job. Accounting is left to complete many processes that should have been completed by HR so we can do our job. I have many friends in upper levels of Accounting. The biggest complaint I have heard from all of them are their biggest nightmare is HR.
As CFO, do you feel that your fellow CFOs are facing the same issues you are? What do you feel about the comments these CFOs have about HR?
My HR Director is the former head of my accounting department. After years of solid work in accounting, she was ready for a change. It has been a great fit. While there was a bit of a learning curve on the HR issues, her team makes very few mistakes on the admininstrative side. She reviews all of our insurance bills and other HR related invoices to be certain we are withholding correctly, and paying the correct amount. That accounting background has been instrumental in her success. Don’t overlook somone with an accounting background who may be ready for a transition to something new when looking to fill an HR position.
Gary
Excellent feedback – Thank you.
The situation you were given definitely helped you, but may not be possible for most other CFOs.
Question I have for you (or any one else) is: Would you bring someone from HR into a stint in the finance group?
Samuel
Samuel
This should be done only if the HR guy is strong with a good FINANCE background otherwise it will add to the already existing chaos.
Rangan
Rangan
Thank you for your input.
Anyone else have a comment or point of view on this subject?
I have had several different reporting relationships with HR as CFO. In most cases, the relationships have been extremely positive when both functions value each other’s skills and strengths and can collaborate on difficult issues to present a united plan/solution to the CEO. Where the functions approach each other in an adversarial mode, the employees and the company suffers. This is especially true where the HR function iis headed by someone who does not have an HR background. In my most recent employment, the head of HR came from a criminal investigation bent, that when combined with her husband (a former police chief) as Director of Security, made for very poor human relations throughout the entire company. Their focus was always on finding something in the prospective employee’s background that might possibly be negative rather than finding the reasons to support hiring the individual. And then, as was commented on earlier, not paying attention to ensuring that the right data was entered into the payroll system so that the weekly payroll could be processed easily without having to make multiple corrections and rerunning payroll 3-4 times per cycle.
Bob, your comments are appreciated.
Yes – mutual respect is a key to being able to work together for the benefit of the company.
Which leads to another question: How can a CFO work to develop mutual respect with HR. Is it possible? What happens when it is not possible?
Samuel
I handlled all accounting and HR issues together, for a very long time. I managed an AP/Purchasing Agent who also ran payroll; and a PT AR Rep. This year, we hired a controller/CPA so I can manage HR and influence organizational development exclusively, The controller has a more extensive background in financial planning and budget than I do, and I welcomed a separation of the responsbilities.
There’s no reason while an organization shouldn’t benefit from a collaboration of these two roles.
Debbie
Absolutely, there is no reason why Finance and HR cannot collaborate. Except…
Expect, they many times do not.
So the question is: Why don’t they?
I think the greatest source of conflict between the operating accounts guys and HR relates to incorrect data put into accounting software or planning tools. This can lead to major accounting and budget issues where finance faces the wrath of the management.
Personally I have saved a lot of embarrasement and rework in accounting and budget by ensuring that finance validates the data at the point of generation.Of course there are cries of “confidentiality lost” from HR but you can take the whole trade off to CEO and get your way through.
HR can spend more time to develop and sustain the corporations culture and vitality with the time saved in data inpput